What Is Government Accounting? | Accounting.com (2024)

Federal, state, and local governments are some of the United States' top employers for accountants. Government accountants oversee public funds and investigate white-collar crime. These professionals may assess financial efficiency and perform audits within government offices and departments. They also ensure compliance with funding policies and laws.

Government accountants usually need at least a bachelor's degree, plus significant experience in the field. Careers in government accounting typically provide comfortable salaries, with the potential for growth as workers gain experience.

In some cases, professionals in government accounting jobs may earn more than their colleagues in other sectors. Glassdoor reports a median annual salary of over $80,000 for federal government accountants — almost $6,000 more than the median for accountants in all industries.

This page explores government accountants' typical job duties. Learn more about skills and specializations in government accounting, and discover how to start a career in the field.

Governmental Accountant Duties

Government finance jobs demand a strong working knowledge of applicable tax codes and policies. Accountants work within those tax codes to ensure both internal and external compliance.

Depending on which type of agency they work for, government accountants may perform different job duties. The list below highlights five key job tasks for this career.

  • Prepare Budgets and Reports: Government accountants prepare budgets for various government branches, departments, and agencies. They also prepare reports on taxes, spending, and general finances. These tasks require careful analysis and documentation.
  • Communicate with Government Officials: Accountants in this field often work alongside government officials to prepare budgets, track finances, and ensure tax compliance. These professionals may also brief officials on financial trends and issues that affect their branches of government.
  • Perform Internal Audits: To comply with tax codes and laws, government accountants often perform financial audits of government agencies and departments. During an audit, accountants analyze financial records, assess spending and income, and document assets.
  • Maintain Accurate Documentation: Using tax software and other programs to keep accurate records is a key task for most government accountants. This documentation then provides necessary information for audits and financial reports.
  • Advise Government Agencies on Spending: Using their knowledge of tax codes and financial policies, accountants advise government officials on best practices for investing, spending, and managing assets.

Key Hard Skills for Government Accountants

Key Soft Skills for Government Accountants

  • Critical Thinking

    Government accountants use critical thinking across all their job duties. These professionals must think critically to create reports, pull financial insights from documents and records, and analyze data.

  • Time Management

    Good time management skills help government accountants manage multiple projects, oversee audits, and prepare reports. Government accountants must manage their time efficiently to fulfill their job duties effectively.

  • Collaboration

    Government accountants often work in departments and agencies that require interdepartmental collaboration. They also collaborate with other department members to produce reports and manage fiscal business.

  • Active Learning

    As accounting trends, issues, and technology develop, government accountants must stay up to date. This requires active learning and a willingness to adapt to change and take on new skills.

Learn about more top accounting skills for success

Government Accounting Areas of Expertise

Government accountants may specialize in accounting subfields that suit their job roles and interests. Professionals with the specializations below often serve in government agencies.

Forensic Accounting

Forensic accountants work with law enforcement agencies at the local, state, and federal levels to investigate financial crimes. The Federal Bureau of Investigation (FBI) uses forensic accountants to analyze financial crime in sectors like healthcare, mortgage and banking, and securities.

Some forensic government accountants gain experience in local or state jurisdictions before pursuing careers in the FBI. They may work with legal professionals, law enforcement, and government officials to prepare findings for criminal and legal proceedings.

Common Job Titles

  • Financial Investigator
  • Financial Risk Manager
  • Financial Consultant

Tax Law

Working as a government tax attorney requires education beyond accounting. To become a tax attorney, candidates must graduate from law school and pass their state bar exam. Tax attorneys need a strong understanding of tax codes and laws, general law, and legal processes.

People with a four-year degree and legal and tax experience may pursue entry-level work with the Internal Revenue Service (IRS) as a tax law specialist. These specialists provide guidance to IRS auditors, taxpayers, and actuaries. Earning a law degree provides a pathway from this career to more advanced roles.

Common Job Titles

  • In-House Financial Counsel
  • Compliance Attorney
  • Tax Law Specialist
  • Tax Attorney

Internal Auditing

Internal auditors work within government agencies. These professionals audit financials from various departments and programs to ensure compliance with budgets and tax codes. They may also assess financial efficiency, program effectiveness, and computer security.

With experience and education, internal auditors can move from entry-level positions to more advanced roles. Positions like intermediate, senior, and chief internal auditor often come with increased earning potential.

Internal auditors also analyze current documentation to advise government departments and agencies on best fiscal practices.

Common Job Titles

  • Internal Auditor
  • Intermediate Internal Auditor
  • Compliance Specialist
  • Chief Internal Auditor

Compliance

Compliance officers at all levels of government ensure that agencies and departments comply with financial laws and codes. The majority of compliance officers in the U.S. work for federal, state, and local governments. Many also work in the corporate sector, making this specialty transferable to other industries.

Also referred to as tax, accounting, or budget specialists, these compliance officers hold a strong knowledge of fiscal policy, laws, and regulations. They apply that knowledge as they analyze documents and data to ensure regulatory adherence.

These officers may also work as grant accountants or managers. In this role, they oversee the distribution of government grants to ensure that their use meets grant requirements.

Common Job Titles

  • Compliance Officer
  • Tax Specialist
  • Accounting and Budget Specialist
  • Grant Accountant

How to Become a Governmental Accountant

The path to a government accounting career depends on which job area you want to pursue. Typically, accountants must hold certain certifications and/or licenses, depending on the state where they work. Qualifying for these credentials usually starts with a four-year degree.

Some roles may demand specialty certifications such as certified public accountant, certified fraud examiner, or certified internal auditor. Government jobs may also set minimum work experience requirements. Senior positions may require a master's degree in accounting and further experience.

Explore accounting degree programs

What Is Government Accounting Salary?

The Bureau of Labor Statistics (BLS) reports that accountants and auditors across all industries earned a median annual salary of $77,250 as of 2021. This figure includes accountants working in local, state, and federal government.

The BLS projects accounting jobs across all industries to grow 6% from 2021-2031, on par with the national average for all occupations.

Specializations, location, experience, and education can affect an accountant's earning potential. Some levels and branches of government pay more than others. Experienced accountants often see salary increases as they climb the ladder.

Questions About What Government Accounting Is

What do governmental accountants do?

Government accountants hold a variety of responsibilities across all government sectors and levels. Their job duties include analyzing financial documents, preparing budgets and reports, performing audits, and assuring compliance.

What is an example of government accounting?

Government accounting encompasses many job titles and roles. Professionals in the field include tax specialists, compliance officers, internal auditors, and forensic accountants. Accountants serve in departments and agencies at all levels of government.

Where does a government accountant work?

Government accountants work at the local, state, and federal government levels. They serve in various roles within each branch. Accountants can work as consultants in their own space, but more often work within government offices.

What skills do you need to be a government accountant?

Government accountants need robust computing and accounting software skills, plus a strong working knowledge of math and statistics. They should be active learners and strong collaborators who can manage their time and projects effectively.

Why is government accounting important?

All branches and levels of government need qualified accountants. These professionals manage government finances and ensure compliance with financial laws, codes, and regulations. Government accountants help government agencies run smoothly and work within budgets.

What Is Government Accounting? | Accounting.com (2024)

FAQs

What is the government accounting? ›

Government accounting is the recording and management of financial activities of governments at Commonwealth, state and local levels. Government accountants prepare and review financial documentation for the government and its taxpayers.

What is the difference between business accounting and government accounting? ›

Reporting Focus: Government accounting reports aim to show the compliance with budgets and the effective use of resources, while business financial statements focus on profitability and financial position.

Is government accounting on the CPA exam? ›

These topics will be moved to the business analysis and reporting (BAR) discipline exam. For example, the advanced governmental accounting topics will be removed from the FAR exam and moved to the BAR exam. The basic governmental accounting topics will still be tested on the FAR core exam.

What does Gasb do? ›

Established in 1984, the Governmental Accounting Standards Board (GASB) is the independent, private- sector organization based in Norwalk, Connecticut, that establishes accounting and financial reporting standards for U.S. state and local governments that follow Generally Accepted Accounting Principles (GAAP).

What is an example of government accounting? ›

An example of government accounting is the preparation of a municipality's Comprehensive Annual Financial Report (CAFR), which includes financial statements and disclosures in accordance with GASB standards.

What are government accounting standards called? ›

The GASB establishes accounting and financial reporting standards for U.S. state and local governments that follow generally accepted accounting principles (GAAP). The Governmental Accounting Research System™ (GARS) provides access to those standards.

Is government accounting public or private? ›

Public accountants work with various clients from individuals to big corporations and sometimes the government. A public accountant often travels to their clients' locations and is often under stringent deadlines. Private accountants usually work typical business hours.

What is gasb vs gaap? ›

The Governmental Accounting Standards Board (GASB) is the organization that determines and updates generally accepted accounting principles (GAAP) for government entities. Thus, GASB is the acting body that enforces and updates GAAP, which are all different accounting principles that are constantly changing.

What is the difference between government accounting and nonprofit accounting? ›

The main difference is that the statements represent the assets that affect different people: for the government's statements, it affects the taxpayers; the nonprofit's statements, it affects those who benefit from the nonprofit.

How is the CPA changing in 2024? ›

Starting in 2024, the CPA Exam will consist of three Core sections that all candidates must pass. They must also pass one of three Discipline sections that focus on a specialized knowledge. Candidates who passed Business Environments and Concepts (BEC) prior to 2024 will not need to pass a Discipline.

How much governmental accounting is on the CPA Exam? ›

Governmental and nonprofit accounting together account for 16-24% of the FAR exam. That is between a fifth and a quarter of the questions on the exam. Many candidates are not familiar with these two sections as most colleges don't teach these in their accounting programs.

How many weeks do you need to study for FAR CPA? ›

CPA Candidates frequently ask about the number of hours they should study in order to pass the FAR section of the CPA exam. The AICPA recommends spending a minimum of 300 to 400 hours studying for the CPA Exam. That equates to 80 to 100 hours of study time for each section.

What are the two types of government financial accounting accounts? ›

State and local governments use two accounting methods to record transactions, modified accrual and accrual methods. Governmental funds use the modified accrual basis of accounting, with a current financial resources focus. Proprietary funds use the accrual basis of accounting, with an economic resources focus.

Is GASB part of GAAP? ›

GASB: The Governmental Accounting Standards Board

That said, GASB also follows GAAP standards. The GASB is also overseen by the Financial Accounting Foundation (FAF).

Who uses GASB? ›

The Governmental Accounting Standards Board (GASB) is the source of generally accepted accounting principles (GAAP) used by state and local governments in the United States.

Why is local government accounting important? ›

With a local government accounting system, of course, it can reduce the risk of errors made by humans. Under these conditions calculations can be carried out accurately and financial reports can be made in a timely manner. Thus financial transactions can be carried out transparently for evaluation.

What are the five types of government funds? ›

Governmental fund reporting often has a budgetary orientation. Governmental funds are classified into five fund types: general, special revenue, capital projects, debt service, and permanent funds.

What are the three major components of public sector accounting? ›

The main purposes of Public Sector Accounting are: (a) Ascertaining the legitimacy of transactions and their compliance with the established norms, regulations and statutes. (b) Providing evidence of stewardship. (c) Assisting planning and control.

What are the branches of accounting? ›

The eight branches of accounting include financial accounting, managerial accounting, cost accounting, tax accounting, auditing, accounting information systems, fund accounting, and international accounting. Each branch serves distinct purposes and contributes to the financial management of organizations.

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